S&P upgrades Keurig

S&P said it raised the corporate credit rating on Keurig Green Mountain Inc. to BB from BB-.

The agency also said it raised the ratings on the company's senior secured credit facilities to BBB- from BB.

The debt is comprised of a $500 million revolver due 2021, $3.175 billion term loan A due 2021, $1.775 billion term loan B due 2023 and €842 million term loan B due 2023.

The company has repaid $750 million in aggregate of funded debt since it was acquired, S&P said.

The agency also said it revised the recovery rating to 1 from 2. The 1 recovery rating indicates 90% to 100% expected default recovery.

The outlook is stable.

The upgrades reflect the upward revision in the forecast for EBITDA expansion and expectations that Keurig will trend toward the 3x leverage range in fiscal 2018, S&P said.

Operating performance has improved because of the new management's manufacturing and procurement initiatives, favorable brewer mix and lower coffee bean costs, the agency said.

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